7/28/2019 LG Rural Marketing Sufiyan
1/32
Sufiyan Alsulkar
Prashant Bansode
Lalit DixitArchana Kane
Akbar Khan
Arif KhanZameer Alam Khan
7/28/2019 LG Rural Marketing Sufiyan
2/32
Deals with delivering manufactured goods/services to
rural producers
Involves an urban to rural activity
Not much developed in India
7/28/2019 LG Rural Marketing Sufiyan
3/32
Motor dealers to set up compact F1outlets for Nano
August 2008, Kolkata
* Will opt for a hub and spoke model to marketNano inRural Areas
* Smaller showroom to set up in surburbs and Rural Areas
* Sources stated some dealers already acquired space in
these areas
* Company believes : Majority sales would come from
Rural India
7/28/2019 LG Rural Marketing Sufiyan
4/32
Airtel promoting mobile telephony in rural markets6th August 2008, Chennai
* New Scheme, Grameen Mobile Puratchi
announced topromote mobile telephony in rural market of TamilNadu
* Will offer customised services to target the farmers* Airtel connection will provide agricultural
information* Other services would offer : weather report, farming
techniques, rural health initiatives, animal husbandry,etc
7/28/2019 LG Rural Marketing Sufiyan
5/32
Santro launches new initiative to tap rural market
July 2008
* Launched a marketing initiative: Ghar Ghar kiPehchaan,
(Valid till 31st July 2008) for tapping rural market
* Rolled out special scheme for government employees in
ruralIndia on purchase of the car
* Planned to touch 58% of Indian villages
* Promoted the scheme through road shows, posters, etc
7/28/2019 LG Rural Marketing Sufiyan
6/32
Himalaya gets ready for Rural Play
June 2008, Bangalore
* Launched SBU for expanding into smaller towns andhinter
land districts
* Rural share of Indiaspharma market rose from 18% to21%
* Survey stated, rural market would contribute as much as
metros
* The districts covered up would rise to 400 from 250
7/28/2019 LG Rural Marketing Sufiyan
7/32
Maruti to focus on Rural Areas to gear up car salesJune 2008, New Delhi
* Launched a PAN India campaign to tap the vast potential
ofthe Rural market
* Conducted a 6month pilot project to increase sales
* Aimed to position itself as the first mover in villages
* Maruti roped in large number of rural banks to increasethe
finance penetration
* Offered cash discounts and other promotional schemes
7/28/2019 LG Rural Marketing Sufiyan
8/32
Pharma firms see big gains in small towns6th June 2008, Ahemdabad
* Lack of infrastructure helped to expand their network
* Challenges in rural areas : inadequate infrastructure,connectivity
problem, unavailability of stockists, reaching the ruralcustomers,
accessibility of doctors, etc* Focus of Rural Marketing : U.P, M.P, Maharashtra, andNorthern
and Southern region
7/28/2019 LG Rural Marketing Sufiyan
9/32
LGs Rural thirst helps drive salesJuly 13, New Delhi
* Company registered a little growth from the rural markets
* Moved its focus to interior of India after establishing inurban
market
* Focuses to penetrate into deeper India after establishing
inurban area
* Rural thrust was strong with Sampoorna T.V
* Geographical reach of the company helped matters
7/28/2019 LG Rural Marketing Sufiyan
10/32
Rural pop is about 73% of the total pop
Total turnover of Rs.4500 Crore & share of 55 %
corporate houses perceived great opportunity
Urban4%, Rural11%
long thought luxury -become a household sight
With 128 million households, the rural population is
nearly three times the urban(MNC)
7/28/2019 LG Rural Marketing Sufiyan
11/32
7/28/2019 LG Rural Marketing Sufiyan
12/32
Increase in income
Growth in education
Enlarged media reach
Growing interaction with urban area
Marketers s effort to reach rural areas
7/28/2019 LG Rural Marketing Sufiyan
13/32
The growing oppurtunity, one main driver
Heat of competition in the urban market
7/28/2019 LG Rural Marketing Sufiyan
14/32
Bihar - Horlick
Punjab - Washing Machine
7/28/2019 LG Rural Marketing Sufiyan
15/32
LG is a South Korean MNC
Worlds 3rd largest appliance maker
LG electronics India was established in January
1997
LG India deals in many products
AC
Flat Panel Display
Microwave Oven
7/28/2019 LG Rural Marketing Sufiyan
16/32
Refrigerator
Television
Vacuum Cleaner
Washing Machine Mobile Phones
7/28/2019 LG Rural Marketing Sufiyan
17/32
7/28/2019 LG Rural Marketing Sufiyan
18/32
LG India- tripled the number of its
retail & distributor outlets in rural
areas from 2004 to 2008. The avg. price of its Sampoorna
range of CTVs came down to about
the price so competitive that, thereby
bridging the gap between CTVs andother local B/W TVs.
It also tapped local forms of
entertainment like annual haats and
fairs and made huge investments in
infrastructure for distribution and
marketing.
7/28/2019 LG Rural Marketing Sufiyan
19/32
Mobile Van at Kasargod
1000 In StoreDemonstrators at Dealercounters in Rural Cities
Promotion ofSampoorna TVs
Cookery Classes at
different locations forRural Housewives
7/28/2019 LG Rural Marketing Sufiyan
20/32
Mobile phone market
penetration strategies
LG-BSNLReliance tie up for rural
market.
Handsets which are cheap and with offers
are provided to the rural customers.
7/28/2019 LG Rural Marketing Sufiyan
21/32
Customization
Positioning
Innovative marketing
Product localization - Productlocalization is a key strategyused by LG. It came out withHindi and regional languagemenus on its TV.
Regional distribution model -This has resulted in quickerrotation of stocks and betterpenetration into the B, C andD class markets.
7/28/2019 LG Rural Marketing Sufiyan
22/32
Population Number of Villages % of Total
Less than 200 114267 18.00%
200-499 155123 24.30%
500-999 159400 25.00%
1000-1999 125758 19.70%
2000-4999 69135 10.80%
5000-9999 11618 01.80% 10000 and above 3064 00.50%
Total 638365 100%
7/28/2019 LG Rural Marketing Sufiyan
23/32
LGs turnover 2002 - 60%Today 40% (urban)
Turnover of 10,750 crore (2008)
13,000 crore (2009) Sales contribution 35% (2008)
Manufacturing capacity 30% by 2009
By 2009-10, urban
4%rural 11%
7/28/2019 LG Rural Marketing Sufiyan
24/32
Political Factor High Import Duty Plants in tax- Incenticve areas like greater noida
and pune. Export promotion schemes of the Indian Govt
like EPCG(Export Promotion Capital goodsscheme) and EOU (Export Oriented Unit) status.
Economic Factor Increase in per capita income Growing GDP high disposable income Increase in Spending Power
7/28/2019 LG Rural Marketing Sufiyan
25/32
Socio Cultural Factor
They are manufacturing Eco friendlyProducts.
Increased Life Style.Technological Factor.
Improvement in Technology made the
electronic product cheaper. Quality of product has been increased
7/28/2019 LG Rural Marketing Sufiyan
26/32
Strenght Market leader in home appliances segment. Manufacturing unit in tax incentive areas. Wide range of products categories to tap the consumer of
middle class, Upper Middle Class and High Class. LG, having the widest distribution network in the
industry (47 branches, 175 area offices and over 10,000trade Partners).
Shifting to Rural Market.Weakness Consumer Compare LG products with its competitor
Samsung, not with other foreign brand. Similar Product Categories are compare to its close
competitors Samsung.
7/28/2019 LG Rural Marketing Sufiyan
27/32
Opportunity:
Shifting to rural Market
Control over the white goods market, as we knowhighest market share in home appliance market
Home Appliance Market is growing very fast, sothere is a opportunity for LG to launch new products.
Threat:
The Closest Competitor Samsung is also from south
Korea and consumer compare LG to Samsung Price war with its closest Competitor, Samsung.
Competitions from Indian Brand and From newEntrants.
7/28/2019 LG Rural Marketing Sufiyan
28/32
Giving Hindi names to the products
How have they reduced cost without affecting the
quality
Videos
Focus the Melas and focus them
Play with their emotions with Ads
7/28/2019 LG Rural Marketing Sufiyan
29/32
Introduction of finance schemes To roll out several new models in low-end segments
Colour televisions and audio systems will have a
big market due to their low pricing policy. Schemes like giving trial of products, and making
them aware of usage of products
The main challenge is electricity or power makingthat kind of products in which there is less usage of
power
7/28/2019 LG Rural Marketing Sufiyan
30/32
Launch more models in their Sampoorna television
range.
Rural market is less affected than urban market in
slowdown. Then makes distribution network morestrong.
7/28/2019 LG Rural Marketing Sufiyan
31/32
Invest $ 40 million in 2009
Expecting Rs 13,000 crore turnover in 2009
15% plus growth rate in rural marketing
Decided to double business by 2010
Launching 5 new Models in Flat Panel Display
Form new kitchen appliance business group
Focus on low-end products
7/28/2019 LG Rural Marketing Sufiyan
32/32
Invest Rs 400 crore on Marketing this year
compared to Rs 350 crore in 2008
Launching 2 by 10 Blue Ocean Strategy